The number of US patents granted to Irish researchers has doubled to 200 annually since 1997, with the high-tech sector accounting for the bulk of those acquired.

But a drastic fall in engineering and science students threatens to undermine this historic shift towards an R&D intensive business culture before it can wield a lasting influence on the wider economy, microelectronics advisory group MIDAS Ireland has warned.

The upsurge in patents confirms that the Republic has shed much of its reliance on manufacturing and is gaining a reputation as a world class centre for innovation, MIDAS said.

Unless drastic steps are taken, however, school leavers' disillusionment with the high-tech industry could jeopardise the State's position as a research hotbed cautioned MIDAS chairman Mr Tom O'Dwyer.

He contrasted figures from the US patents office which show 400 patents granted to Irish researchers over the past two years with a 20 per cent fall in applications to study electrical engineering at third level in 2002.

As patents cost €10,000 to €20,000 to register they were not sought lightly - the majority were developed into successful new products.

Many applications were backed by major multinationals, which would switch their attention from Ireland should they struggle to fill graduate positions.

The high calibre of Irish technology graduates was a major drawing point for multinationals - but the Republic risks taking a backwards step if the supply of qualified workers begins to dry up.

Ireland was not the only country to report a reduction in science and technology graduates - but the pool of expertise here was much smaller than in countries such as India which were increasingly challenging for foreign investment, said Mr O'Dwyer. "There has been an over-reaction to the slowdown in the high-tech economy. Most of the job losses have been concentrated in the manufacturing rather than research sector but this fact has been generally overlooked."

MIDAS, which represents some of the state's largest employers and academic institutions, will launch a fresh appeal for third-level technology students at the Young Scientist Exhibition in Dublin this week.